Harley Davidson Value Chain Analysis

1. Value Chain Analysis

The following paragraphs will analyze two of the primary activities (service and marketing&sales) and two of the supportive activities (procurement and technological department).

Service

Harley believes customers’ satisfaction is their priority so they provided customers with better pre- and post- sales services. By introducing training programs to employees, dealers are equipped with professionals to better assist their customers. For example, it is the pioneer of offering test ride, riding instruction classes, rental and insurance services. In addition to improvement of retail experience, Harley also pleased its customers by providing customization opportunities. Each individual will get the chance to personalize their motorcycles by choosing different engine types, basic frames and augmentation through a range of 7000 accessories.

Marketing & Sales

According to the article, Harley did not spend a lot on advertising comparing to its competitors. However, Harley still owns about 50% market shares of heavyweight motorcycles in North America. Due to the fact that “North America [is] the largest market for big bikes [which] representing 56% of the sales in the major world markets, Harley’s success in North America helped it become the most profitable motorcycle company worldwide. And the reason why Harley is popular in North America is that Harley has a strong association with American Culture. Its strong brand image attracts the baby-boom generation to buy its products for achieving the American dream. The Harley Owner’s Group (HOG) is actually another marketing strategy which helps Harley to gain public attention. The company was able to get involved in social and charity events though HOG. By joining HOG activities, owners who had Harley bikes in the past are encouraged to repurchase new ones.

Procurement

Harley realized that bought-ins and customized components generated more manufacturing costs. So the company rearranged its management structure and used supplier advisory council (SAC) to compensate for lack of bargaining power. SAC were able to create more values by promoting collaborations and establishing good relationships with Harley’s suppliers. This procurement activity helped the company achieve purchasing efficiency.

Technology Development

Since Harley does not sell cars, R&D could only be used for motorcycles. Unlike Honda and BMW, Harley had very small investment on R&D. Their automotive technologies are considered to be outdated because they were using the old-style engines and old paint designs. The speed of developing new products or technologies is quite slow comparing to other companies such as Honda, Yamaha and BMW. In 1998, Harley had its new Twin Cam88, the new engine